Corporate Moving — Shipping lines set walk away rates as fall in freight rates slows
The recent decline in freight rates is beginning to stabilise, as shipping lines have now established their walk away rates which signify the minimum rates they are willing to accept for business. These rates are a significant reduction from the inflated rates seen during the pandemic, with many trades now operating below their pre-pandemic levels.
While lower freight rates can be beneficial in reducing the overall cost of international sea-freight moves, it is essential to note that the carrier service issues prevalent in the worldwide shipping market since the pandemic continue to persist and remain unresolved. However, we are seeing a gradual improvement in shipping lines’ acceptance of container bookings on most outbound trades from the UK, with vessel capacity and scheduled sailings typically available with a notice period of two weeks or less.
In response to the falling freight rates, shipping lines have introduced various measures to compensate for the decline. These include cancellation of entire vessel schedules, changes to destination ports-of-call, and ‘slow-steaming’ to reduce fuel consumption. As a result, advertised voyage times may be slower than expected, and last-minute re-booking of loaded containers onto a later vessel may occur.
Moving companies and customers should be prepared for uncertainties and slower overall transit times, even after a vessel has departed. It is important to note that shipping lines are known for their lack of compensation for delays. Furthermore, the trade imbalance on specific routes poses an additional challenge for shipping lines, leading to a shortage of empty sea containers available for re-loading and export. This may impact customers’ preferred moving dates in some cases.
Despite the challenges mentioned, Santa Fe Relocation benefits from negotiated annual freight contracts, which help mitigate the impact and contribute to stability. We anticipate that the current uncertainty will gradually settle, and stability will slowly be restored in the coming months.
When planning your move, it is crucial to account for the current market availability. Generally, the acceptance of container bookings for export shipments from the UK has significantly improved in recent months, leading to successful bookings on preferred vessel sailing dates.
There have been no significant changes in eastbound trades from Europe (shipments to Asia, Oceania, India, and the Middle East). Acceptance of bookings is currently good, but there is a higher likelihood of cancelled sailings and slow steaming. Customers should know that sea-container shipments to these regions may take longer than expected.
Accepting bookings is currently suitable for westbound trades from Europe (USA, Canada, the Caribbean, and Latin America). Additionally, the waiting time for unloading at most USA ports continues to improve. However, during the peak season summer months, high demand for container space on these trade routes may result in a shortage of empty containers. Furthermore, destination ports in the Pacific Northwest, such as Seattle, Portland, and Vancouver, still do not have direct “all water” service, with alternative routes offered via ports on the US East Coast. Delays may also occur due to intermittent congestion on the US rail networks.
The situation remains unchanged for southbound trades from Europe (South, East, and West Africa). Where a shipping line does offer service to this area, it is typically reliable. However, many hinterland destinations have been removed from the shipping line schedules due to main port congestion and inadequate transport infrastructure. As a result, the coverage of main destination ports across this region, especially the Indian Ocean Islands, has been reduced.
Regarding UK haulage, the recent challenges in container road haulage, caused by a shortage of drivers, have significantly improved due to the easing of demand. Most shipping lines have withdrawn their Driver Retention surcharge (DRS). During the previous driver shortage, moves were transhipped from van to sea container via loading at the mover’s warehouse, which protected against substantial additional costs associated with a container no-show at the customer’s residence. While we prefer to load containers at the customer’s residence when feasible directly, it should be noted that most container hauliers prefer the certainty of collecting from the mover’s warehouse. This is particularly true in busy cities with limited parking, restricted residence access, and increasing Low Emission Zone surcharges. Therefore, customers should know that direct residence loading is more prone to container no-shows, whereas loading via the mover’s warehouse offers greater certainty.
We want to assure all customers that Santa Fe Relocation has extensive experience in the industry, and we are committed to providing efficient and trouble-free overseas moves. This update aims to provide unbiased information on shipping and its various challenges. If you have any questions or concerns, please do not hesitate to contact Henk Schutte.
Henk SchutteHead of Logistics UK, Germany, SwitzerlandSanta Fe Relocation UKTel: +44 0208 9633171Email: henk.schutte@staging.santaferelo.com
